Current Yield

Masters of the Junkyard

No doubt about it—junk bonds have been among the winners in this year's credit-market selloff. They've shrugged off interest-rate worries in ways that corporate bonds and Treasurys have not—to say nothing of municipal bonds. While that's great news for junk-bond index funds, it's even sweeter for some other folks. Many junk-bond fund managers have handily beaten the benchmark.

That's a significant turnabout. The best data suggest, at most, a limited ability for managers to outrun passive investing over time. A study by...